Category Archives: Marketing

The Corporations’ Non-Financial Disclosures

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The American Institute of Certified Public Accountants’ Jenkins Report may be considered as one of the major documents that has provided the foundations for non-financial disclosures. Notwithstanding, there were other guidelines that were developed by other non-governmental organizations (NGOs), including; the Global Reporting Initiative, AccountAbility, Accounting for Sustainability (A4S), the World Intellectual Capital Initiative (WICI), the Enhanced Business Reporting Consortium, the CDP (formerly known as the Carbon Disclosure Project), the International Corporate Governance Network, the Sustainability Reporting Standards Board and the Climate Disclosure Standards Board, among others. The International Standards Organization (ISO), Forest Stewardship Council (FSC), Greenpeace, Rainforest Alliance and Home Depot Certifiable, Fair Trade and the US Department of Agriculture’s USDA Organic Labelling, among others, have formulated uncertifiable, multi-stakeholder standards and instruments to support organizations in their CSR communication. In addition, certain listed corporations are adopting Fortune’s reputation index, the KLD Social index or RepTrak (Camilleri, 2017). Such measures require corporate executives to assess the extent to which their organization behaves responsibly towards the environment and the community. Despite the development of these guiding principles and indices, their appropriateness remains doubtful (Camilleri, 2015).

In 2010, the development of ISO 26000 had represented a significant milestone in integrating socially and environmentally responsible behaviors into management processes. ISO 26000 was developed through a participatory multi-stakeholder process as the International Labor Organization (ILO) had established a Memorandum of Understanding (MoU) to ensure that ISO’s social responsibility standard is consistent with its own labor standards. In fact, ISO 26000’s core subject on ‘Labor Practices’ is based on ILOs’ conventions on labor practices, including; Human Resources Development Convention, Occupational Health and Safety Guidelines, Forced Labor Convention, Freedom of Association, Minimum Wage Fixing Recommendation and the Worst Forms of Child Labor Recommendation, among others. Moreover, ISO’s core subject on ‘human rights’ is based on the Universal Declaration of Human Rights (that was adopted by the UN General Assembly in 1948). On the other hand, many academic commentators argue that ISO 26000 has never been considered as a management standard (Camilleri, 2017). The certification requirements have not been incorporated into ISO 26000’s development and reinforcement process, unlike other standards, including ISO 9000 and ISO 14001. Notwithstanding, ISO 14001 belongs to a larger set of ISO 14000 certifications that conform with the European Union’s Eco-Management and Audit Scheme (EMAS).

The European Union (EU) has developed its non-binding guidelines for the non-financial disclosures of large, public-interest entities that engage more than 500 employees (Stubbs and Higgins, 2015; EU, 2014). The European Parliament mandated Directive 2014/95/EU on non-financial reporting; that was subsequently ratified by the European member states. Therefore, large undertakings are expected to disclose material information on their ESG behaviors. These entities are required to explain any deviations from their directive’s recommendations in their annual declaration of conformity, as per the EU’s “Comply or Explain” principle (Camilleri, 2015; EU, 2014). Their non-financial disclosures include topics, such as; social dialogue with stakeholders, information and consultation rights, trade union rights, health and safety and gender equality, among other issues. Moreover, the organizations’ environmental reporting could cover; material disclosures on energy efficiencies, the monitoring of efficiency levels their energy generation capacities, assessments on the co-generation of heating facilities, the use of renewable energy, greenhouse gas emissions, water and air pollution prevention and control from the production and processing of metals, mineral industry, chemical industry, waste management, livestock farming, etc. (Camilleri, 2015). Therefore, large undertakings are expected to bear responsibility for the prevention and reduction of pollution. The EU recommends that the large organizations implement ILO’s Tri-partite Declaration of Principles on Multinational Enterprises and Social Policy, as well as other conventions that promote the fair working conditions of employees. It also makes reference to the OECD Guidelines for Multinational Enterprises, the 10 principles of the UN Global Compact, the UN Guiding Principles on Business and Human Rights, and mentions ISO 26000 Guidance Standard on Social Responsibility (EU, 2014). Following, the EU’s mandate for non-financial reporting, it is expected that 6,000 European public interest entities will be publishing their sustainability reports in 2018, covering financial year 2017-2018 (GRI, 2017).

 


Additional Reading:

Camilleri, M.A (2015). Environmental, Social and Governance Disclosures in Europe. Sustainability Accounting, Management and Policy Journal. 6 (2), 224 – 242. Emerald.  http://www.emeraldinsight.com/doi/abs/10.1108/SAMPJ-10-2014-0065 Download this paper

Camilleri, M.A. (2015). Valuing Stakeholder Engagement and Sustainability Reporting. Corporate Reputation Review, 18 (3), 210-222. Palgrave Macmillan DOI:10.1057/crr.2015.9 http://www.palgrave-journals.com/crr/journal/v18/n3/full/crr20159a.html Download this paper

Camilleri, M.A. (2017). Measuring the corporate managers’ attitudes toward ISO’s social responsibility standard. Total Quality Management & Business Excellence. (forthcoming). http://dx.doi.org/10.1080/14783363.2017.1413344 http://www.tandfonline.com/doi/full/10.1080/14783363.2017.1413344 Download this paper

Camilleri, M.A. (2017). Corporate Sustainability, Social Responsibility and Environmental Management: An Introduction to Theory and Practice with Case Studies. Springer, Heidelberg, Germany. ISBN 978-3-319-46849-5 http://www.springer.com/us/book/9783319468488

CSRWire (2015). Environmental, Social and Governance Reporting in Europe. http://www.csrwire.com/blog/posts/1574-environmental-social-and-governance-disclosures-in-europe

 

 

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Announcing Emerald’s latest academic textbook, “The Branding of Tourist Destinations”

This authoritative book was edited by Mark Anthony Camilleri. It provides students and practitioners with a good understanding of different tourism products, marketing strategies and tactics on destination branding, as well as useful insights on sustainable and responsible tourism practices, among other topics. The readers are equipped with a strong pedagogical base on the attractiveness of tourist destinations as this publication presents contemporary conceptual discussions and empirical studies on several aspects of destination branding.

 

Tourism marketers, including destination management organizations (DMOs) are formulating strategies and tactics to attract prospective visitors. Hence, this book also sheds light on the latest industry developments in travel, tourism, hospitality and events in different contexts around the world.

Chapter 1 introduces the readers to different aspects of the travel, tourism, hospitality and leisure industries, including; the visitors’ accessibility, accommodation, attractions, activities and amenities. The author explains how tourist destinations are capable of customizing their products to customer segments and individuals, by offering; adventure tourism, business tourism (including meetings, incentives, conferences and events), culinary tourism, cultural (or heritage) tourism, eco-tourism (or sustainable tourism), educational tourism, health (or medical tourism), religious tourism, rural tourism, seaside tourism, sports tourism, urban (or city) tourism, wine tourism, among other niche areas.

Chapter 2 provides an explanation of destination marketing, place branding and their related notions. The authors critically review the conceptual developments on the branding of tourist destinations.

Chapter 3 suggests that destination management organisations ought to engage in fruitful relationships with internal and external stakeholders. The authors maintain that there are several factors that can affect the strategic management of these organisations.

Chapter 4 explores how Sweden is branding its destinations by improving its cultural identify and by providing multi-sensory experiences to its visitors.

Chapter 5 sheds light on the agritourism businesses in Italy’s Campania region. The author analyses the main critical success factors for a thriving rural tourism market.

Chapter 6 explains the key elements of cultural tourism, including the destination’s heritage, lifestyle, and “Made in Italy”. The authors put forward a tourism development model. They suggest that it represents a functional framework for the benefit of tourism practitioners.

Chapter 7 explores the consumer-based brand equity of events. The authors explain how the organization of events, including music festivals could add value to the destinations’ image. They imply that the visitors’ positive experiences and their word-of-mouth publicity can contribute to the destinations’ branding.

Chapter 8 explores the destination branding of Porto in Portugal. The authors analyze the visitors’ attitudes on Porto’s largest wine festival. They assess their visitors’ level of satisfaction with the event and their intention to return.

Chapter 9 identifies the key elements that serve as drivers for the development of oleotourism in Jaen, Spain. The authors suggest that there is scope in stakeholder engagement amongst the main actors and drivers in the sector.

Chapter 10 investigates the environmental behaviour of three-, four- and five-star hotels in Azuay, Ecuador. The authors explored the relationship between environmental responsibility and stakeholder engagement. Their findings suggest that the hotel managers strive in their endeavours to implement responsible environmental practices to avoid regulatory pressures.

Chapter 11 examines the relationship between the destinations’ image and brand equity. The author contends that the tourists’ hedonic and monetary values can have a moderating effect on the country-of-origin’s image and brand extension.

Chapter 12 investigates the relationship between the customers’ satisfaction, commitment, trust and loyalty toward hospitality brands. It develops and empirically test the social identity construct (customer brand identification and other critical social exchange constructs (satisfaction, trust, commitment).

This publication was written by academics for other scholars, researchers, advanced under-graduate and post-graduate students. However, it is also relevant to the industry practitioners, including consultants, senior executives and managers who work for destination management organizations, tourism offices, hotels, inbound / outbound tour operators and travel agents, among others. The book explains all the theory and the empirical studies in a simple and straightforward manner. It describes the various marketing environments that comprise a wide array of economic, socio-cultural and environmental realities.

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My Latest Edited Book on Destination Marketing

An Excerpt from the Preface of “Strategic Perspectives in Destination Marketing” (forthcoming):

The marketing of a destination relies on planning, organization and the successful execution of strategies and tactics. Therefore, this authoritative book provides students and practitioners with relevant knowledge of tourism planning and destination marketing. The readers are equipped with a strong pedagogical base on the socio-economic, environmental and technological impacts on the attractiveness of tourist destinations. At the same time, this publication presents contemporary conceptual discussions as well as empirical studies on different aspects of the travel and tourism industries.

The readers of this book will acquire a good understanding of the tourism marketing environment, destination marketing and branding, pricing of tourism products, tourism distribution channels, etourism, as well as on sustainable and responsible tourism practices, and among other topics. They will appreciate that the tourism marketers, including destination management organizations (DMOs) are increasingly using innovative tools, including; digital media and ubiquitous technologies to engage with prospective visitors. Hence, this book also sheds light on the latest industry developments in travel, tourism, hospitality and events.

Chapter 1 introduces the readers to the tourism concept as it describes the travel facilitators and motivators. Afterwards, it explains several aspects of the tourism product, including; the visitors’ accessibility, accommodation, attractions, activities and amenities. It categorizes different travel markets; including; adventure tourism, business tourism (including meetings, incentives, conferences and events), culinary tourism, cultural (or heritage) tourism, eco-tourism (or sustainable tourism), educational tourism, health (or medical tourism), religious tourism, rural tourism, seaside tourism, sports tourism, urban (or city) tourism, wine tourism, among other niche areas.

Chapter 2 examines how foreign tourist intermediaries perceive Portugal as a tourist destination. It analyzes the promotional information that they use to attract visitors to this Southern European destination. This contribution recognizes that the tour operators have an important role in intermediating the relationship between the tourists and the tourism service providers. The authors suggest that tourism relies on the destination’s image that is often being portrayed by the foreign tourism intermediaries.

Chapter 3 explores the cruising consumers’ behaviors and their decision-making processes. The authors maintain that the destination, the social life on board as well as the cruise features are very important factors for consumer loyalty. In conclusion, they recommend that cruise lines should create synergies with local institutions in tourist destinations.

Chapter 4 investigates the Spanish inhabitants’ opinions on the tourism industry’s seasonality issues. The findings suggest that the local residents who live in the coastal destinations were in favor of having tourism activity throughout the year; as opposed to other host communities from urban and rural destinations (in Spain) who indicated that they would enjoy a break from tourist activity during the low / off peak seasons.

Chapter 5 provides a critical review about the pricing and revenue management strategies that are increasingly being adopted within the tourism and hospitality contexts. The authors introduce the readers to the concept of “rate fencing”. This proposition suggests that businesses ought to differentiate among various customer segments, as they should attract and develop relationships with the most profitable ones.

Chapter 6 appraises the use of qualitative reviews and quantitative ratings in interactive media. The authors also engage in a discussion on the content analysis of the online users’ generated content (UGC). They posit that it is in the interest of tourism and hospitality businesses to respond to positive and negative word of mouth publicity in reasonable time, as they may have to deal with fake and unverified reviews.

Chapter 7 clarifies how online travel businesses, including; AirTickets, AirBnB and TripAdvisor among others, are continuously investing in their communication technologies and infrastructures to improve their online users’ experience. The author contends that innovative technologies, such as recommender systems and control frameworks are supporting the travel businesses’ in their customer-centric approaches.

Chapter 8 discusses about the concept of the brand identity of destinations from the suppliers’ perspective. The author puts forward a case study on the city of Porto, in Portugal. She explicates how this tourist destination has used an authenticity-based approach to leverage itself as a distinct brand identity among other destinations.

Chapter 9 proposes an ambitious plan to attract visitors to Buxton, Derbyshire. Firstly, the authors focus on the marketing endeavors of a local renovated hotel. Secondly, they provide relevant examples of how other wellness and spa towns in Britain, including; Bath and Harrogate are organizing events and festivals to attract international tourists throughout the year.

Chapter 10 explains how a perceived (positive) image can provide a sustainable competitive advantage to tourism destinations. The authors argue that the historical events as well as other socio-political factors can possibly affect the visitors’ (pre-)conceptions of the Gallipoli peninsula in Turkey. However, they imply that the tourists’ positive experiences could translate to positive publicity for this destination.

Chapter 11 elucidates the notion of destination branding in the rural context. The author maintains that there are both opportunities and challenges for tourism policy makers to preserve the traditional farms and rural dwellings, in order to safeguard their distinct identity. He posits that the rural environment can add value to the tourist destinations and their branding.

Chapter 12 posits that today’s tour operators are highly driven by technology as prospective travelers are searching for online information about their destinations prior to their visits. The authors describe the digital marketing strategies and tactics that are used to promote Malawi, in Africa. They suggest that the inbound tour operators are increasingly using relevant content marketing through interactive technologies and social media to engage with prospective visitors.

Chapter 13 evaluates potential strategies that could be used to develop the tourism product in Adiyaman, Turkey. The authors identify the core responsibilities of the tourism stakeholders and put forward their key recommendations for the branding of this rural destination.

In sum, this authoritative publication is written in an engaging style that entices the curiosity of prospective readers. It explains all the theory in a simple and straightforward manner. This book reports on the global tourism marketing environments that comprise a wide array of economic, socio-cultural and environmental issues. It explains how technological advances have brought significant changes to the tourism industry and its marketing mix.

This book was written by academics for other scholars, researchers, advanced under-graduate and post-graduate students; as it provides a thorough literature review on different tourism topics, including; destination marketing and branding, sustainable and responsible tourism, tourism technologies, digital marketing, travel distribution and more. It is also relevant to the industry practitioners, including consultants, senior executives and managers who work for destination management organizations, tourism offices, hotels, inbound / outbound tour operators and travel agents, among others.

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Tourism Futures: Targeting Customers in the Digital Age

This is an excerpt from: Camilleri’s latest book on Travel Marketing (2018)

How to Cite: Camilleri, M. A. (2018). Market Segmentation, Targeting and Positioning. In Travel Marketing, Tourism Economics and the Airline Product (Chapter 4, pp. 69-83). Springer, Cham, Switzerland.

The advances in technology have enabled many businesses to reach their potential customers by using digital and mobile applications.

Google, Facebook, Ebay and Amazon, among others are dominating digital marketing; and are pushing the entire field of advertising to new levels. The use of personal info, web-browsing, search history, geographic location, apps and eCommerce transactions have gone mainstream. For example, Google has begun using transaction records to prove that its ads are working, and are pushing people to make more online purchases. This allowed the technology giant to determine the effectiveness of its digital ad campaigns and to verify their conversion rates.

All individuals leave a “digital trail” of data as they move about in the virtual and physical worlds. This phenomenon is called, “data exhaust”. Initially, this term that was used to describe how Amazon.com has used predictive analytics as it suggested items to its customers. However, pre­dictive analytics cannot determine when and why individuals may decide to change their habitual behaviours, as the possibility of “one off” events must never be discounted. Yet, a firm with sufficient scarce resources could be in a position to exploit big data and analytics to improve its businesses operations.

For instance, Deloitte Consulting have developed a mobile app that has enabled Delta Airlines’ executives to quickly query their operations. For instance, when users touch an airport on a map, the system brings up additional data at their disposal. Executives could also drill further down to obtain granular information on staffing requirements. and customer service levels, as they identify and predict problems in their airline operations.

Nevertheless, business intelligence and predictive analytics could possibly raise a number of concerns. Many customers may be wary of giving their data to the businesses and their stakeholders. Very often, the technological advances anticipate legislation, and its deployment. These contingent issues could advance economic and privacy concerns that regulators will find themselves hard-pressed to ignore. Some academics argue that the digital market and its manipulation may be pushing the limits of consumer protection law. Evidently, society has built up a set of rules that are aimed to protect personal information. Another contentious issue is figuring out the value of data and its worth in monetary terms. In the past, companies could have struggled to determine the value of their business; including patents, trade secrets and other intellectual property.

Targeted Segmentation through Mobile Devices

The mobile is an effective channel to reach out to many users. Portable devices, including smart phones and tablets are surely increasing the productivities and efficiencies of individuals as well as organisations. This has led to the growth of mobile applications (apps). As a result, the market for advertising on mobile is still escalating at a fast pace. Moreover, there are niche areas as new applications are being developed for many purposes on different mobile platforms.

Recent advances in mobile communication and geo-positioning technologies have presented marketers with a new way how to target consumers. Location-targeted mobile advertising involves the provision of ad messages to mobile data subscribers. This digital technology allows marketers to deliver native ads and coupons that are customised to individual consumers’ tastes, geographic location and the time of day. Given the ubiquity of mobile devices, location-targeted mobile advertising are increasingly offering tremendous marketing benefits.

In addition, many businesses are commonly utilising applications, including browser cookies that track consumers through their mobile devices, as they move out and about. Very often, when internet users leave the sites they visited, the products or services they viewed will be shown to them again in retargeted advertisements, across different websites. Several companies are using browsing session data combined with the consumers’ purchase history to deliver “suitable” items that consumers like. There are also tourism businesses who are personalising their offerings as they collect, classify and use large data volumes on the consumers’ behaviours. As more consumers carry smartphones with them, they may be easily targeted with compelling offers that instantaneously pop-up on their mobile screens.

Furthermore, consumers are continuously using social networks which are indicating their geo-location, as they use mobile apps. This same data can be used to identify where people tend to gather. This information is valuable to brands as they seek to improve their consumer engagement and marketing efforts. Therefore, businesses are using mobile devices and networks to capture important consumer data. For instance, smart phones and tablets interact with networks and convey information on their users’ digital behaviours and physical movements to network providers and ISPs. These devices have become interactive through the proliferation of technologies, including; near-field communication (NFC). Basically, embedded chips in the customers’ mobile phones are exchanging data with the retailers’ items possessing such NFC tags. The latest iPhone, Android and Microsoft smartphones have already incorporated NFC ca­pabilities. The growth of such data-driven, digital technologies is surely adding value to the customer-centric marketing. The latest developments in analytics are enabling businesses to provide a deeper personalisation of content as they use socio-demographic and geo-data that new mobile technologies are capable of gathering.

For example, mobile service companies are partnering with local cinemas, in response to the location-targeted mobile advertising; as cinema-goers may inquire about movie information, and could book tickets, and select their seats through their mobile app. These consumers who are physically situated within a given geographic proximity of the participating cinemas may receive location-targeted mobile ads. The cinemas’ ads will inform prospects what movies they are playing and could explain how to purchase tickets through their smart phone. The consumers may also call the cinemas’ hotlines to get more information from a customer service representative. Besides location-targeted advertising, the mobile companies can also promote movie ticket sales via mobile ads that are targeted to individuals, according to their behaviour (not by location). Therefore, companies may direct their mobile-ad messages to those consumers who had previously responded to previous mobile ads (and to others who had already purchased movie tickets, in the past months). Moreover, the cinema companies can also promote movies via Facebook Messenger Ads if they logged in the companies’ websites, via their Facebook account. Mobile users may also receive instant message ads via pop-up windows whenever they log into the corporate site of their service provider.

It is envisaged that such data points will only increase in the foreseeable future, as the multi-billion dollar advertising monopolies are being built on big data and analytics that are helping businesses personalise immersive ads as they target individual customers. The use of credit card transactions is also complementing geo-targeting and Google Maps, with ads; as the physical purchases are increasingly demanding personalisation, fulfillment and convenience. There may be consumers and employees alike who out of their own volition, are willing to give up their data for value. Therefore, the businesses need to reassure them through concise disclosures on how they will use personal data. They should clarify the purpose of maintaining their consumer data, as they are expected to provide simple user controls to opt in and out of different levels of data sharing. This way, they could establish a trust-worthy relationship with customers and prospects.

Companies are already personalising their shopping experience based on the user situation and history. Tomorrow’s tourism businesses are expected to customise the user experiences of their mobile applications and web interfaces, according to the specific needs of each segment. Big data and analytics capabilities are increasingly allowing businesses to fully leverage their rich data from a range of new digital touchpoints and to turn them into high impact interactions. Those businesses that are able to reorient their marketing and product-development efforts around digital customer segments and behaviours will be in a position to tap into the hyper-growth that mobile, social media and the wearables markets are currently experiencing.

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The Segmentation of Demographics in the Travel Industry

This is an excerpt from: “Market Segmentation, Targeting and Positioning”

How to Cite: Camilleri, M. A. (2018). Market Segmentation, Targeting and Positioning. In Travel Marketing, Tourism Economics and the Airline Product (Chapter 4, pp. 69-83). Springer, Cham, Switzerland.

Demographic segmentation involves dividing the market into groups that are identifiable in terms of physical and factual data. The demographic variables may include; age, gender, income, occupation, marital status, family size, race, religion and nationality. These segmentation methods are a popular way of segmenting the customer markets, as the demographic variables are relatively easy to measure. For example, the age range for business travellers may usually span from their late twenties to their mid-fifties.

Younger employees are travelling for business purposes and their buying habits are completely different than their older counterparts. On average, millennials took 7.4 business trips in the last year, compared to 6.4 for Generation Xers and 6.3 for baby boomers (Skift, 2018). Younger travellers are less likely to book air travel based on loyalty programme perks. They are more likely to book their flight according to the airline service and the customer experience they offer. Moreover, young travellers are more likely to use room share services like Airbnb, than other segments (Skift, 2018). However, for the time being, major hotel brands are not under any serious threat.

At the same time, Uber and other ridesharing services are becoming mainstream across all age groups, as they may be cheaper than taxis (Pew Research, 2016). The age range in the leisure market is a very broad one and quite different to that in the business market. Children particularly can play an important role in leisure travel, as they travel abroad on holidays with their families. Young people in their early to mid-twenties too are prepared to spend their disposable income on travel before they take on the responsibilities of family life. At the other end of the scale, we have those who are retired from work, are in a relatively good health and in good financial position which allows them to travel.

In the past, middle-aged males dominated the business travel market. However, recently, the advertising and promotion of airline services have increasingly targeted female business travellers. This market controls 60% of U.S. wealth and influences 85% of purchasing decisions (Skift, 2014). The female gender is high-tech, connected, and social. They represent 58% of online sales (Skift, 2014). To maintain their competitive edge, travel brands must start focusing their campaigns to better target women. The leisure travel market is far more balanced in terms of gender. In fact, in older categories of leisure travellers, that is over the age of sixty, women outnumber men due to their longer life expectancy (Boston Globe, 2016).

The ability to travel for leisure purposes greatly depends on an individual’s income. Leisure travel is a luxury which may be foregone when times are financially difficult. Generally, as personal income rises, the demand for air travel increases. However, should there be a recession, money belts are tightened, and less leisure trips may be taken. This is an example of a concept known as income elasticity (this topic will be discussed in Chapter 8). Income elasticity can be defined as the relationship between changes in consumers’ income level and the demand for a particular item.

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The political environment of marketing

 

This is excerpt from: Camilleri, M.A. (2018). Travel Marketing, Tourism Economics and the Airline Product, Springer, Milan, Italy. ISBN 978-3-319-49849-2


To be successful, companies must adapt to ongoing trends and developments in their macro and micro environments. Therefore, it is in the interest of organisations to scan their marketing environment to deal with any possible threats from the market and to capitalise on any available opportunities. This chapter explains the external environmental factors, including; political, economic, social and technological influences. It also considers the internal environmental factors, including; capital structures, resources, capabilities and marketing intermediaries; as it identifies competitive forces from differentiated or low-cost service providers.

A sound knowledge of the customer requirements is an essential ingredient for a successful business. For this reason, companies should consistently monitor their marketing environment. The marketing environment is continuously changing, as it consists of a number of unpredictable forces which surround the company.

The regulatory and competitive conditions as well as other market forces, including; political, economic, social and technological forces, could affect the organisational performance of the tourism businesses. Hence, this chapter will look into some of these issues. The tourism industry is highly influenced by economic factors, including; strong exchange rate fluctuations, the price of oil and other commodities, among other matters. Moreover, social factors including global concerns about safety and security could influence tourist behaviours. Notwithstanding, the regulatory environments will also have an impact on tourism and airline businesses. For instance, the airline industry’s deregulation and liberalisation has created numerous opportunities for many airlines, including low-cost carriers. At the same time, it has threatened inefficient airlines who have been protected by regulation.

Competition is a vitally important element in the marketing environment and it should not be under-estimated. The businesses competitors comprise suppliers of substitute products. They may be new entrants in the marketplace. Alternatively, they may include customers and suppliers who were stakeholders of the business. In this light, tourism marketers should be knowledgeable of different business models as competition can take different forms, like for example, differentiated, full-service companies or low-cost service providers. For these reasons, organisations should have effective mechanisms to monitor the latest developments in the marketing environment.

Environmental Scanning

Environmental scanning entails the collection of information relating to the various forces within the marketing environment. This involves the observation and examination of primary and secondary sources of information, including online content from business, trade, media and the government, among others. The environmental analysis is the process of assessing and interpreting the information gathered. An ongoing analysis of the gathered data may be carried out by marketing managers or by researchers who have been commissioned to conduct market research (as explained in the previous chapter). Through analysis, marketing managers can attempt to identify extant environmental patterns and could even predict future trends. By evaluating trends and tendencies, the marketing managers should be able to determine possible threats and opportunities that are associated with environmental fluctuations. When discussing the ‘marketing environment’ we must consider both the external environment (i.e. the macro-environment) as well as the internal environment (i.e. the micro-environment) (Kotler, Armstrong, Frank & Bunn, 1990).

The Macro Environment

The tourism businesses must constantly assess the marketing environment. It is crucial for their survival and achievement of their long-term economic goals. Therefore, marketing managers must engage in environmental scanning and analysis. Most firms are comfortable assessing the political climates in their home countries. However, the evaluation of political climates in foreign territories is far more problematic for them. Experienced international businesses engage in political risk assessment, as they need to carry out ongoing systematic analyses of the political risks they face in foreign countries. Political risks are any changes in the political environment that may adversely affect the value of any firm’s business activities. Most political risks may result from governmental actions, such as; the passage of laws that expropriate private property, an increase in operating costs, the devaluation of the currency or constraints in the repatriation of funds, among others. Political risks may also arise from non-governmental actions when there is criminality (for example: kidnappings, extortion and acts of terrorism, et cetera). Political risks may equally affect all firms or may have an impact on particular sectors, as featured hereunder. Non-governmental political risks should also be considered. For example, Disneyland Paris and McDonalds have been the target of numerous symbolic protests  who view them as a convenient target for venting their unhappiness with US international agricultural policies. In some instances, protests could turn violent, and may even force firms to shut down their operations, in particular contexts.

Typical Examples of Political Risks

Type                                                   Impact on Firms
Expropriation Loss of future profits.
Confiscation Loss of assets, loss of profits.
Campaigns against businesses Loss of sales; increased costs of public relation; efforts to improve public image.
Mandatory labour benefits legislation Increased operating costs.
Kidnappings, terrorist threats and other forms of violence Increased security costs; increased managerial costs; lower productivity.
Civil wars Destruction of property; lost sales; increased security costs.
Inflation Higher operating costs.
Repatriation Inability to transfer funds freely.
Currency devaluations Reduced value of repatriated earnings.
Increased taxation Lower after-tax profits.

 

References:

Camilleri, M. A. (2018). The Marketing Environment. In Travel Marketing, Tourism Economics and the Airline Product (pp. 51-68). Springer, Cham, Switzerland.

Kotler, P., Armstrong, G., Franke, G., & Bunn, M.D. (1990). Marketing: An Introduction, Vol. 1. New Jersey: Prentice Hall.

 

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Social Responsibility Research in Total Quality Management and Business Excellence (Taylor & Francis Online)

 

This is a pre-publication version of an academic paper, entitled; “Measuring the corporate managers’ attitudes toward ISO’s social responsibility standard”, that was accepted by Total Quality Management and Business Excellence (Print ISSN: 1478-3363 Online ISSN: 1478-3371).

How to Cite: Camilleri, M.A. (2018). Measuring the corporate managers’ attitudes toward ISO’s social responsibility standard. Total Quality Management & Business Excellence. (forthcoming). http://dx.doi.org/10.1080/14783363.2017.1413344


Abstract

The International Standards Organisation’s ISO 26000 on social responsibility supports organisations of all types and sizes in their responsibilities towards society and the environment. ISO 26000 recommends that organisations ought to follow its principles on accountability, transparency, ethical behaviours and fair operating practices that safeguard organisations and their stakeholders’ interests. Hence, this contribution presents a critical review of ISO 26000’s guiding principles. Afterwards, it appraises the business practitioners’ attitudes towards social responsibility practices, including organisational governance, human rights, labour practices, the environment, fair operating practices, consumer issues as well as community involvement and development. A principal component analysis has indicated that the executives were primarily committed to resolving grievances and on countering corruption. The results suggested that the respondents believed in social dialogue as they were willing to forge relationships with different stakeholders. Moreover, they were also concerned about environmental responsibility, particularly on mitigating climate change and sustainable consumption. In conclusion, this paper identifies the standard’s inherent limitations as it opens up future research avenues to academia.

Keywords: ISO 26000; International Standards Organisation; Social Responsibility; Organisational Governance; Human Rights; Labour Practices; environmental responsibility; fair operating practices; consumer issues; community involvement.


Introduction

The International Standard Organisation’s ISO 26000 provides guidance on social responsibility issues for businesses and other entities. This standard comprises broad issues, comprising labour practices, conditions of employment, responsible supply chain management, responsible procurement of materials and resources, fair operating practices, recommendations for negotiations with interested parties as well as collaborative stakeholder engagement among other issues (Helms, Oliver, & Webb, 2012; Castka & Balzarova, 2008a, 2008b, 2008c). ISO 26000 is aimed at all organisations, regardless of their activity, size or location. Its core subjects respect the international norms and assist organisations on accountability, transparency and ethical behaviours.

The social responsibility standard has emerged following lengthy partnerships’ agreements and negotiations between nongovernmental organisations (NGOs) and large multinational corporations (Helms et al., 2012; Boström & Halström, 2010; Castka & Balzarova, 2008a, 2008b, 2008c). Prior to ISO 26000, there were other certifiable and uncertifiable, multistakeholder standards and instruments; the Forest Stewardship Council (FSC), Greenpeace, Rainforest Alliance and Home Depot, among others (Balzarova & Castka, 2012; Castka & Corbett, 2016a). At the time, many organisations adopted voluntary environmental and social standards, as well as eco-labels such as ISO’s 14000, FSC, Fair Trade or the US Department of Agriculture’s USDA Organic Labelling. Like ISO 26000, their regulatory guidelines and principles encourage organisations and their stakeholders to become more socially responsible and environmentally sustainable. However, despite there are many standards and regulatory instruments, private businesses do not always provide credible information on their eco-labelling (Darnall, Ji, & Vazquez-Brust, 2016).

For this reason, environmental NGOs are putting pressure on national governments for more stringent compliance regulations on large undertakings to adhere to certified standards or ecolabels (Schwartz & Tilling, 2009). This approach could possibly inhibit the businesses and other organisations to reveal relevant information about their social responsibility and stakeholder engagement (Castka & Corbett, 2016b). Notwithstanding, there is still limited research and scant empirical evidence on how businesses are resorting to ISO 26000’s principles in their responsible managerial practices (see Hahn, 2013; Hahn & Weidtmann, 2016; Claasen & Roloff, 2012; Castka & Balzarova, 2008a, 2008b)Therefore, this contribution provides a review of the socially responsible standard’s guiding principles and appraises the executives’ attitudes towards ISO 26000. Firstly, it examines relevant theoretical insights and empirical studies on the managerial perceptions towards responsible organisational behaviours. Secondly, it sheds light on the development of ISO’s standard on social responsibility and its constituent elements. Thirdly, this paper reveals the managers’ perceptions of ISO 26000’s core topics, including organisational governance, human rights, labour practices, the environment, fair operating practices, consumer issues as well as community involvement and development. This research uses a principal component analysis (PCA) to obtain a factor solution of a smaller set of salient variables from ISO 26000’s core issues. The findings identify specific socially responsible activities which are being emphasised by the companies’ executives. The results suggest that the respondents were committed to improving their relationships with employees, marketplace as well as political and community stakeholders.

Literature review

The managerial perceptions of social responsibility

Several empirical studies have explored the managers’ attitudes towards and perceptions of corporate social responsibilities (Carollo & Guerci, 2017; Eweje & Sakaki, 2015; Moyeen & West, 2014; Fassin, Van Rossem, & Buelens, 2011; Pedersen, 2010; Basu & Palazzo, 2008; Nielsen & Thomsen, 2009 and Perrini, Russo, & Tencati, 2007, among others). A number of similar studies have gauged corporate social responsibility by adopting Fortune’s reputation index (Fryxell & Wang, 1994; Griffin & Mahon, 1997; Stanwick & Stanwick, 1998), the KLD index (Fombrun, 1998; Griffin & Mahon, 1997) or Van Riel and Fombrun’s (2007) RepTrak. Such measures required executives to assess the extent to which their company behaves responsibly towards the environment and the community (Fryxell & Wang, 1994). Despite their wide usage in past research, the appropriateness of these indices is still doubtful. For instance, Fortune’s reputation index failed to account for the multidimensionality of the corporate citizenship construct, and is suspected to be more significant of management quality than of corporate social performance (Waddock & Graves, 1997). Fortune’s past index suffered from the fact that its items were not based on theoretical arguments, as they did not appropriately represent the economic, legal, ethical and discretionary dimensions of the corporate citizenship construct.

Other academics, including Pedersen (2010), identified a set of common issues that were frequently used by managers when describing societal responsibilities. This study reported that managers still had a relatively narrow perception of societal responsibilities. Generally, they believed that CSR involves taking care of the workforce, and to manufacture products and deliver services that the customers want, in an eco-friendly manner. The managers who participated in Pedersen’s (2010) study did not believe that they had responsibilities towards society on issues such as social exclusion, Third World development and poverty reduction, among other variables. In a similar vein, Eweje and Sakaki (2015) pointed out that corporate social responsibility involved volunteering, diversity in the workplace and work–life balance. They contended that these are important areas that merit more attention, particularly for those businesses that are willing to prove their credentials. Moreover, Moyeen and West (2014) noticed that sustainable development and environmental issues often remained on the periphery of the managers’ understandings and perceptions of CSR

ISO’s social responsibility standard

In 2010, the development of ISO 26000 has represented a significant milestone in integrating socially and environmentally responsible behaviours into management processes (Toppinen, Virtanen, Mayer, & Tuppura, 2015; Hahn, 2013). ISO 26000 was developed through a participatory multi-stakeholder process with an emphasis on participatory decision-making and

democracy (Hahn & Weidtmann, 2016). For instance, the International Labour Organization (ILO) had established a Memorandum of Understanding (MoU) to ensure that ISO’s social responsibility standard is consistent with its very own labour standards. In fact, ISO 26000’s core subject on ‘Labour Practices’ is based on ILOs’ conventions on labour practices, including

Human Resources Development Convention, Occupational Health and Safety Guidelines, Forced Labour Convention, Freedom of Association, Minimum Wage Fixing Recommendation and the Worst Forms of Child Labour Recommendation, among others. Moreover, ISO’s core subject on ‘human rights’ is based on the Universal Declaration of Human Rights (adopted by the UN General Assembly in 1948).

The standard comprises seven essential areas in the realms of social responsibility: organisational governance, human rights, labour practices, environment, fair operating practices, consumer issues, and community involvement and development (ISO, 2014). ISO’s goal is to encourage organisations to integrate their guiding principles on social responsibility into their management strategies, systems and processes. Therefore, ISO 26000 assists in improving environmental, social and governance communications and also provides guidance on stakeholder identification and engagement (Camilleri, 2015a). It advises the practising organisations to take into account their varied stakeholders’ interests. According to Castka and Balzarova (2008a, p. 276), ‘ISO 26000 aims to assist organisations and their networks in addressing their social responsibilities as it provides practical guidance on how to operationalise CSR, by identifying and engaging with stakeholders and enhancing credibility of reports and claims made about CSR (Hąbek & Wolniak, 2016). Therefore, this standard has the potential to capture the context-specific nature of social responsibility.

ISO 26000 has been characterised as an evolutionary step in standard innovation because it is suitable for organisations of all sizes and sectors. This standard has unique features regarding authority and legitimacy (Hahn, 2013). Its guidelines describe social responsibility as ‘the actions a firm takes to contribute to “sustainable development”’ (Perez-Baltres, Doh, Miller, & Pisani, 2012, p. 158). Hahn (2013) suggested that ISO 26000 offers specific guidance on many facets of CSR, as it helps responsible businesses in their internal and external assessments and evaluations. Furthermore, when the organisations adopt ISO 26000, they could signal their social responsibility credentials and qualities to their marketplace stakeholders (Graffin & Ward, 2010). This way they may also reduce information asymmetries among supply chain partners (King, Lenox, & Terlaak, 2005).

ISO 26000 provides a unilateral understanding of social responsibility across the globe. It acknowledges that ‘social responsibility should be an integral part of the businesses’ core strategy (ISO, 2014). A wide array of social responsibility practices and stakeholder management issues are addressed in ISO 26000. This standard aims to unify and standardise social responsibility; it also acknowledges that each organisation has a responsibility to bear that are relevant to its business (Hąbek & Wolniak, 2016; Hahn, 2013). Notwithstanding, there are different industries, organisational settings, regional or cultural circumstances that will surely affect how entities implement the ISO standards ‘recommendations on responsible behaviours’.

The corporate culture is an important driver for socially responsible activities. Therefore, CEOs play a key role in giving their face and voice to their corporate sustainability agenda (Waldman et al., 2006; Caprar & Neville, 2012). Hence, ISO 26000 can be used as a vehicle for CSR communication. Hąbek and Wolniak (2016) suggested that this standard is rooted in a quality management framework, as it holds potential to enhance the credibility of the corporations’ social responsibility claims. Similarly, Moratis (2015) argued that the concept of credibility relates to scepticism, trust and greenwashing. Other research has demonstrated that some stakeholders have used standards to enhance their credibility, learning and legitimacy (Hąbek & Wolniak, 2016; Boström & Halström, 2010). Consequently, the organisations that are renowned for their genuine CSR credentials could garner a better reputation and image among stakeholders. This will ultimately result in significant improvements to the firms’ bottom lines. An organisational culture that promotes the sustainability agenda has the potential to achieve a competitive advantage, as businesses could improve their long-term corporate financial performance (Eccles, Ioannou, & Serafeim, 2012) via the development of valuable, rare and non-imitable organisational resources and capabilities (Barney, 1986). Eccles et al. (2012) analysed the financial performance of firms with either high or low sustainability orientation. The authors found that firms with a high sustainability orientation were associated with distinct governance mechanisms for sustainability, longer time horizons and deeper stakeholder engagement, as they dedicated more attention to non-financial disclosures. Their adoption of the sustainability standards, such as ISO 26000, can also be interpreted as a signal of a responsible corporate culture (Waldman et al., 2006).

On the other hand, many academic commentators argue that ISO 26000 has never been considered as a management standard. The certification requirements have not been incorporated into ISO 26000’s development and reinforcement process, unlike other standards, including ISO 9000 and ISO 14001(Hahn, 2013). In its present form, ISO 26000 does not follow a classical plan–do–check–act–type management system approach as it is the case for ISO 14001 (Hahn, 2013). Arimura, Darnall, and Katayama (2011) reported that the facilities that were certified with ISO’s 14000 were 40% more likely to assess their suppliers’ environmental performance and 50% more likely to require that their suppliers undertake specific environmental practices. Nevertheless, Arimura, Darnall, Ganguli, and Katayama (2016) argued that although ISO 14001 was a certifiable standard, the facilities that were adopting it were no more likely to reduce their air pollution emissions than noncertified ones.

Rasche and Kell (2010) admitted that the responsibility standards can never be a complete solution to the perennial social and environmental problems; they argued that the standards have inherent limitations that need to be recognised. Certain prestandardisation preparations may have created boundaries which have restricted the stakeholders’ influence. Suchman (1995) described the pre-standardisation phase as an effort which embedded new structures and practices into already legitimate institutions. During the pre-standardisation discussions among stakeholders, there were differing opinions and not enough consensus over ISO 26000’s certification (Mueckenberger & Jastram, 2010). Other authors declared that the certification of standards does not necessarily lead to improved performance (Aravind & Christmann, 2011; King et al., 2005). The development of ISO 26000 involved lengthy, multi-stakeholder corroborations that did not necessarily ensure legitimacy or guarantee that the standard could be considered as an enforceable instrument for industry participants. Balzarova and Castka (2012) also pointed out that the scope of the ISO 26000 standard was unclear as the actual implications for social and environmental improvement were still unknown. Many stakeholders, including chief executives, should have been in a position to leverage their arguments during the pre-standardisation arrangements (Balzarova & Castka, 2012). The responsible businesses could have discussed possible avenues for the standard’s reinforcement. For instance, those organisations that are in complete compliance with ISO 26000 are not required to disclose their social responsibility reports and to make them readily accessible to stakeholders (Balzarova & Castka, 2012). This contentious issue could lead organisations to not fully conform themselves to this uncertifiable standard.

Different industry representatives were (and are still) concerned that costly certification requirements could overburden organisations, particularly in emerging economies. The organisations’ stakeholders, including their employees, may be against the introduction of new standards as they could affect their firms’ bottom lines. When the standards are enforced, industry stakeholders need to comply with their requirements. The companies will usually have to absorb the cost of compliance with the standards (Delmas, 2002). Moreover, the standards may also lead to the creation of trade barriers and to significant increases in production costs (Montabon, Melnyk, Sroufe, & Calantone, 2000). Notwithstanding, when introducing new standards, the standard setters’ external audits could reveal regulatory non-compliance among adopting organisations (Schwartz & Tilling, 2009; Delmas, 2002). As a result, the industries’ implementation of a new standard such as ISO 26000 could be time-consuming because it may require holistic adaptations to change extant organisational processes. The standardisation of social responsibility has also been criticised for being costly and thereby difficult to implement, especially among the smaller companies (Toppinen et al., 2015).

Ávila et al.’s (2013) survey indicated that ISO 26000’s themes were under-represented, particularly those involving labour practices and the environment. The authors posited that the organisations that were supposedly following ISO 26000 have often faced difficulties in incorporating the social responsibility throughout all organisational mechanisms, processes and decisions. Ávila et al. (2013) argued that the businesses’ unsatisfactory engagement with consumer issues was even more serious, as they justify the organisations’ existence. It may appear that Ávila et al.’s (2013) research participants were only concerned about their corporate image (as they were supposedly implementing the social responsibility concept and its premises). Evidently, these firms were less interested in undertaking necessary actions to ensure truthful and fair compliance with ISO 26000.

Methodology

This research has explored the senior executives’ stance on ISO’s social responsibility standard. The respondents were all employed by listed companies in a small European member country. They were expected to indicate their attitudes towards and perceptions of ISO 26000’s core topics, including organisational governance, human rights, labour practices, the environment, fair operating practices, consumer issues as well as community involvement and development. The questionnaire’s design, layout and content were consistent with the social responsibility standard. Respondents were asked to indicate the strength of their agreement or disagreement with ISO 26000’s subjects. The survey instrument made use of the five-point Likert scaling mechanism, where a numerical value was attributed to the informant’s opinion and perception. The responses were coded from 1 (strongly disagree) to 5 (strongly agree) with 3 signalling indecision. Such symmetric, equidistant scaling has provided an interval level of measurement.

An online questionnaire link was sent electronically by means of an email, directly to the senior executives of all companies that were listed on the Malta Stock Exchange. There were numerous attempts to ensure that the questionnaire has been received by all email recipients. Many steps were taken to ensure a high response rate, which included reminder emails and numerous telephone calls. Eventually, there was a total of 374 (out of 1626) respondents who have willingly chosen to take part in this research. This sample represented a usable response rate of 23% of all targeted research participants. The surveyed respondents gave their socio-demographic details about their ‘role’, ‘age’, ‘gender’ and ‘education’ in the latter part of the survey questionnaire. The objective of this designated profile of owner-managers was to gain a good insight into their ability to make evaluative judgements in taking strategic decisions on social responsibility matters. Table 1 presents the profile of respondents who participated in this study.

 

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Following the data gathering process, the researcher carried out descriptive statistics to analyse the distribution and dispersion of the data. Afterwards, factor analysis (FA) data reduction techniques were used to achieve the desired reliability, timely and accurate assessment of the findings. Unless an instrument is reliable, it cannot be valid. The FA was developed to explore and discover the main construct or dimension in the data matrix. The primary objective of this analysis was to reduce the number of variables in the data-set and to detect any underlying structure between them (Hair, Anderson, Tatham, & Black, 1998). Therefore, FA identified the interrelationships among variables. FA extracted components to obtain a factor solution of a smaller set of salient variables which exhibited the highest variation from the linear combination of original variables (Hair et al., 1998). It then removed this variance and produced a second linear combination which explained the maximum proportion of the remaining variance. The first step was to decide which factor components were going to be retained in the PCA. This approach was considered appropriate as there were variables that shared close similarities and highly significant correlations. The criterion for retaining factors is that each retained component must have some sort of face validity and/or theoretical validity, but prior to the rotation process, it was impossible to interpret what each factor meant. The first component accounted for a fairly large amount of the total variance. Each succeeding component had smaller amounts of variance. Although a large number of components could be extracted, only the first few components will be important enough to be retained for interpretation.

The SPSS default was set to keep any factor with an eigenvalue larger than 1.0. If a factor component displayed an eigenvalue less than 1.0, it would have explained less variance than the original variable. Once the factors have been chosen, the next step was to rotate them. The goal of rotation was to achieve what is called a ‘simple structure’, with high factor loadings on one factor and low loadings on all others. The factor loading refers to the correlation between each retained factor and each of the original variables. With regard to determining the significance of the factor loading, this study had followed the guidelines for identifying significant factor loadings based on the specific sample size, as suggested by Hair et al. (1998).

Analysis

The survey questionnaires’ responses were imported directly into SPSS. After filtering responses and eliminating unusable or incomplete survey observations, a total of 374 valid responses were obtained. The managers of the listed companies were required to indicate their level of agreement with ISO 26000 core subjects. Reliability and appropriate validity tests have been carried out during the analytical process. Cronbach’s alpha was calculated to test for the level of consistency among the items.

Principal component analysis

Bartlett’s test of sphericity revealed sufficient correlation in the data-set to run a PCA since P< .001. The Kaiser–Meyer– Olkin’s Test (which measures the sampling adequacy) was also acceptable, as it was well above 0.5. With respect to scale reliability, all constructs were analysed for internal consistency by using Cronbach’s alpha. The composite reliability coefficient (Bagozzi & Yi, 1988) was 0.79, well above the minimum acceptance value of 0.7.

PCA has been chosen to obtain a factor solution of a smaller set of salient variables, from a much larger data-set. A varimax rotation method was used to spread variability more evenly among the constructs. PCA was considered appropriate as there were variables exhibiting an underlying structure. Many variables shared close similarities as there were highly significant correlations. Therefore, PCA has identified the patterns within the data and expressed it by highlighting the relevant similarities (and differences) in each and every component. In the process, the data have been compressed as it was reduced in a number of dimensions without much loss of information. From SPSS, the PCA has produced a table which illustrated the amount of variance in the original variables (with their respective initial eigenvalues), which were accounted for every component. There was also a percentage of variance column which indicated the expressed ratio, as a percentage of the variance (for each component). A brief description of the extracted factor components, together with their eigenvalues and their respective percentage of variance, is provided in Table 2 . The sum of the eigenvalues equalled the number of components. Only principal components with eigenvalues greater than 1 were extracted, and they accounted for more than 63% variance before rotation. The PCA analysis yielded 17 extracted components from ISO 26000’s 37 variables. These factor components were labelled following a cross-examination of the variables with the higher loadings. Typically, the variables with the highest correlation scores had mostly contributed towards the make-up of the respective component.

total variance

Discussion and conclusions

Many stakeholders, particularly the regulatory ones, from the most advanced economies are increasingly inquiring about the corporations’ responsible behaviours. Very often, multinational businesses are resorting to the NGOs’ tools and instruments, such as process and performance-oriented standards in corporate governance, human rights, labour, environmental

protection, anti-corruption as well as health and safety, among others (Camilleri, 2015a). In this light, ISO 26000 standard has been chosen to investigate company executives’ stance towards social responsibility practices.

This empirical research suggests that the respondents’ responsible and sustainable behaviours were both internally and externally focused. The managers indicated that they were paying attention to their human rights issues, labour and fair operating practices. Table 2 reported that the executives gave due importance to resolving grievances and anti-corruption within their organisation. This finding is consistent with other contributions which link CSR with the human resources management literature (Currie, Gormley, Roche, & Teague, 2016; Hahn, 2013; Wettstein, 2012; Pedersen, 2010; Ewing, 1989). The workplace conflict may be intrinsic to the nature of work, because employees and managers may have hard-to-reconcile competing interests (Currie et al., 2016). Ewing (1989) argued that companies develop grievance procedures to help them in their due processes. The author maintained that its development leads to better morale and productivity, fewer union interventions and less likelihood of being sued. However, grievance procedures could incur operating costs, often consume large amounts of previous time from executives and may open the door to chronic malcontents.

This study evidenced that the corporations’ managers were clearly against corrupt practices. Today’s listed businesses are increasingly expected to explain how they are fighting fraudulent activities and bribery issues. This study was conducted in a European Union jurisdiction which mandates a ‘comply or explain’ directive on non-financial reporting (Camilleri, 2015b). The European corporations are expected to be as transparent as possible, to disclose material information and to limit the pursuit of exploitative, unfair or deceptive practices (Camilleri, 2015b). Moreover, large organisations that are operating in member states (that have ratified the ILO’s conventions on labour rights) are morally and legally bound to promote fair operating practices and to engage in social dialogue. The findings suggest that the respondents were committed to forging relationships with different stakeholders, including suppliers and market intermediaries, the wider communities at large, as well as political groups, among others. Porter and Kramer (2011) contended that capable local suppliers foster greater logistical efficiency and ease of collaboration in areas, such as training, in order to boost productivity. Therefore, the success of every company is affected by supporting stakeholders and the extant infrastructure around it. The big businesses’ stakeholder engagement is rooted in institutional theory, as they are capable of aligning themselves with their broader context (Brammer, Jackson, & Matten, 2012). In fact, this study has also measured the respondents’ attitudes on social engagement (including the creation of jobs and skills development, the conditions of employment and the individuals’ civil and political rights) and on the subject of discrimination towards vulnerable groups, among other contingent topics. Moreover, the listed companies’ executives also indicated that they were concerned on environmental sustainability, particularly on global climate change. The corporations’ managers did not explain how they were committed to reduce the carbon footprint or prevent the emission of greenhouse gases. However, they may use new technologies, including renewable energy, water use and conservation. Alternatively, they could change older equipment to reduce pollution and make it more efficient and economical. The results suggest that respondents respected property rights, they utilised and consumed sustainable resources, and were concerned on protecting the natural environment.

Limitations and suggestions for future research

The extant literature has recognised this ISO 26000’s inherent limitations. For the time being, the businesses that are using this standard are not required to disclose material information on their social responsibility practices to stakeholders. One of the most contentious issues is that ISO 26000 still remains voluntary and uncertifiable. The practitioners may ultimately decide not to fully conform themselves with this standard, as they are not bound to do so. For this reason, ISO 26000’s role is still limited for regulators, standard-setting organisations and policy-makers.

In a nutshell, this paper has advanced an empirical study that explored the business executives’ appraisal of social responsibility practices. It has employed ISO 26000 as a comprehensive measure for organisational governance, human rights, labour practices, the environment, fair operating practices, consumer issues, and community involvement and development. Moreover, this contribution has critically analysed key theoretical underpinnings and previous empirical studies on the social responsibility standard. Further research may yield other conclusions about how responsible organisations and corporations could use this standard to appraise their social responsibility endeavours. Future studies could explore different stakeholders’ views, other than the corporation executives’ stance on ISO 26000 subjects. Academia could utilise ISO’s broad standard as a measure for social responsibility behaviours. Moreover, qualitative research could clarify in depth and breadth how organisations are mapping their progress and advancement in the implementation and monitoring of the standard’s responsible initiatives. Future research could identify certain difficulties in incorporating the social responsibility standard throughout the organisational systems and processes.

Acknowledgements

The author thanks this journal’s editor and his anonymous reviewers for their insightful remarks and suggestions.

Disclosure statement

No potential conflict of interest was reported by the author.

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The tourism businesses’ stakeholder engagement through digital media

dmExcerpt from: Camilleri, M.A. (2017) The promotion of responsible tourism management through digital media. Tourism Planning and Development. (forthcoming). http://dx.doi.org/10.1080/21568316.2017.1393772 Download this paper

Managers and executives are in a position to amplify the effectiveness of their company’s CSR communication efforts. They should decide what to communicate (i.e. message content) and where to communicate (i.e. message channel) to reach out to different stakeholders. This study has identified and analysed the determinants which explain the rationale for the utilisation of digital media for CSR reporting. Previous academic research may have paid limited attention to the engagement of ICT among small businesses within the retail industry. In this case, the research findings suggest that digital technologies and applications were found to be useful for the promotion of social and sustainable activities. This implies that the use of digital media can be viewed as a critical success factor that may lead to an increased engagement with stakeholders.

In the past, CSR practices have provided a good opportunity for hotels and restaurants to raise their profile in the communities around them. Very often, businesses have communicated their motives and rationales behind their CSR programmes in conventional media. Today, companies have additional media outlets at their disposal. Savvy businesses are already promoting their responsible entrepreneurship initiatives as they are featured in different media outlets (e.g., The Guardian Sustainability Blog, CSRwire, Triple Pundit and The CSR Blog in Forbes among others). In addition, there are instances where consumers themselves, out of their own volition are becoming ambassadors of trustworthy businesses. On the other hand, there are stakeholders who are becoming skeptical on certain posturing behaviours and greenwashing (Vorvoreanu, 2009). Generally, digital communications and traditional media will help to improve the corporate image and reputation of firms. Moreover, positive publicity may lead to forging long lasting relationships with stakeholders. Hence, corporate web sites with user-centred designs that enable interactive information-sharing possibilities including widgets and plugins will help to promote the businesses’ CSR credentials (Font et al., 2012). Inter-operability and collaboration across different social media may help tourism businesses to connect with all stakeholders.

This contribution suggests that there is potential for marketers to create an online forum where prospects or web visitors can engage with their business in real time. These days, marketing is all about keeping and maintaining a two-way relationship with consumers, by listening to their needs and wants. Digital marketing is an effective tool for consumer engagement. A growing number of businesses have learnt how to collaborate with consumers on product development, service enhancement and promotion (Xiang & Gretzel, 2010). Successful companies are increasingly involving their customers in all aspects of marketing. They join online conversations as they value their stakeholders’ attitudes, opinions and perceptions. Today, ubiquitous social media networks are being used by millions of users every day. In a sense, it may appear that digital media has reinforced the role of public relations. These contemporary marketing communications strategies complement well with CSR communication and sustainability reporting. In conclusion, this contribution encourages hospitality owner managers to use digital channels to raise awareness of their societal engagement, environmentally sustainable practices and governance procedures among their stakeholders.

 

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Springer’s textbook for tourism students and practitioners, including airline managers

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Springer’s authoritative textbook, Travel Marketing, Tourism Economics and the Airline Product has received numerous endorsements from leading academics.

“Dr. Camilleri provides tourism students and practitioners with a clear and comprehensive picture of the main institutions, operations and activities of the travel industry.”
Philip Kotler
, S.C. Johnson & Son Distinguished Professor of International Marketing, Kellogg School of Management, Northwestern University, Evanston/Chicago, IL, USA

“This book is the first of its kind to provide an insightful and well-structured application of travel and tourism marketing and economics to the airline industry. Student readers will find this systematic approach invaluable when placing aviation within the wider tourism context, drawing upon the disciplines of economics and marketing.”
Brian King, Professor of Tourism and Associate Dean, School of Hotel and Tourism Management, The Hong Kong Polytechnic University, Hong Kong

“The remarkable growth in international tourism over the last century has been directly influenced by technological, and operational innovations in the airline sector which continue to define the nature, scale and direction of tourist flows and consequential tourism development. Key factors in this relationship between tourism and the airline sector are marketing and economics, both of which are fundamental to the success of tourism in general and airlines in particular, not least given the increasing significance of low-cost airline operations. Hence, uniquely drawing together these three themes, this book provides a valuable introduction to the marketing and economics of tourism with a specific focus on airline operations, and should be considered essential reading for future managers in the tourism sector.”
Richard Sharpley, Professor of Tourism, School of Management, University of Central Lancashire, UK

“The book’s unique positioning in terms of the importance of and the relationships between tourism marketing, tourism economics and airline product will create a distinct niche for the book in the travel literature.”
C. Michael Hall, Professor of Tourism, Department of Management, Marketing and Entrepreneurship, University of Canterbury, Christchurch, New Zealand

“A very unique textbook that offers integrated lessons on marketing, economics, and airline services. College students of travel and tourism in many parts of the world will benefit from the author’s thoughtful writing style of simplicity and clarity.”
Liping A. Cai, Professor and Director, Purdue Tourism & Hospitality Research Center, Purdue University, West Lafayette, IN, USA

“An interesting volume that provides a good coverage of airline transportation matters not always well considered in tourism books. Traditional strategic and operational issues, as well as the most recent developments and emerging trends are dealt with in a concise yet clear and rational way. Summaries, questions and topics for discussion in each chapter make it a useful basis for both taught courses or self-education.”
Rodolfo Baggio, Professor of Tourism and Social Dynamics, Bocconi University, Milan, Italy

“This is a very useful introductory book that summarises a wealth of knowledge in an accessible format. It explains the relation between marketing and economics, and applies it to the business of airline management as well as the tourism industry overall.”
Xavier Font, Professor of Sustainability Marketing, School of Hospitality and Tourism Management, University of Surrey, UK and Visiting Professor, Hospitality Academy, NHTV Breda, Netherlands

“This book addresses  the key principles of tourism marketing, economics and the airline industry. It  covers a wide range of theory at the same time as offering real-life case studies, and offers readers a comprehensive understanding of  how these important industries work, and the underpinning challenges that will shape their future. It is suitable for undergraduate students as well as travel professionals, and I would highly recommend it.”
Clare Weeden, Principal Lecturer in Tourism and Marketing at the School of Sport and Service Management, University of Brighton, UK

“In the current environment a grasp of the basics of marketing to diverse consumers is very important. Customers are possessed of sophisticated knowledge driven by innovations in business as well from highly developed technological advances. This text will inform and update students and those planning a career in travel and tourism. Mark Camilleri has produced an accessible book, which identifies ways to accumulate and use new knowledge to be at the vanguard of marketing, which is both essential and timely.”
Peter Wiltshier, Senior Lecturer & Programme Leader for Travel & Tourism, College of Business, Law and Social Sciences, University of Derby, UK

“This contemporary text provides an authoritative read on the dynamics, interactions and complexities of the modern travel and tourism industries with a necessary, and much welcomed, mixture of theory and practice suitable for undergraduate, graduate and professional markets.” 
Alan Fyall, Orange County Endowed Professor of Tourism Marketing, University of Central Florida, FL, USA

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The Travel Products’ Price Determinants

This is an excerpt from my latest tourism textbook, entitled; ‘Travel Marketing, Tourism Economics and the Airline Product’. This publication will be available through Springer and Amazon.com.


Price Determinants
The type of pricing strategy which marketing managers consider is determined by a number of factors, including: organisatonal and marketing objectives; types of pricing objectives; cost levels; other marketing mix variables; market demand; competition, and legal and regulatory issues, among other matters.

Organisational and Marketing Objectives

Company policy and image, target profit margins and staff count could influence the type of pricing policy which the marketing managers will apply. Company policy and image will play an important role when determining a pricing strategy. The price set must be consistent with the general corporate objectives and the strategic direction of the company. For example, a full-service airline may want to be associated with the top-end of the market by providing a high-quality service to the business travel segment. To price below the average rate for such a service may imply an inferior and poor-quality service.

Any airline which would like to target the business market should provide an extensive schedule and a high-quality service. Therefore, it will require considerable resources and capabilities to do so.

Pricing Objectives

The most fundamental pricing objective is that of survival pricing. When experiencing severe competition, businesses may be forced to offer lower prices than their rivals. This way they will generate revenue, and improve their chances of survival. A tourism service or sub-product will not generate revenue if it is not used over a given period of time (it will perish) . While the service or sub-products may be available for sale at some later point in time, the revenue that was originally lost, can never be regained. For example, a hotel had thirty empty rooms on a specific date. These empty rooms cannot be sold at a later date because the service has been completed, and perished. Similarly, an airline could depart with empty seats which cannot be sold at a later date.

Moreover, the demand for tourism products is usually seasonal. For example, many north Americans flee south to Hawaii and to the Caribbean, during the winter months; whilst Australasians travel to Europe during the summer months of June, July and August. Of course, seasonality may be due to other factors, other than climate, including; vacation and holiday periods. For example, families may habitually travel at the same time of the year, usually over Christmas, Easter or summer periods. This is the usual close-down time period for schools, industry and commerce, in many countries. Since tourism is highly seasonal, suppliers may reduce their prices during off-peak times. Hence, a low price strategy assists in creating demand particularly among price-sensitive customers. Conversely, operators may charge higher prices when there are peaks in demand, due to major attractions and special events.

Profit maximisation is another pricing objective. However, it may prove difficult to measure, as businesses could not be in a position to determine when they have reached maximum profit. As a result, profit maximisation may be evaluated according to a certain ‘level of satisfaction’. A change in profit relative to previous periods may be considered as satisfactory or unsatisfactory for the businesses. The setting of prices to obtain a fixed rate of return on a company’s investment is a profit-related objective. Many businesses could be aiming to achieve a specific profit.

Another possible pricing objective is that of increasing market share. Many companies may design pricing policies which will enable them to improve their market share. However, at times, they may be satisfied with their current status in the market. In this case, their objective would be to retain their status quo. Companies with such an objective may not use pricing as a competitive tool. They will probably maintain a steady market share by nurturing their brand equity.

Cost Levels

The marketing managers should be careful to analyse all costs so that they will be included in the total cost. Therefore, the pricing of products should be based on the company’s direct and indirect costs (and may consider overhead expenses) if they are projecting a certain profitability margin.

Other Marketing Mix Variables

The marketing mix elements, including; promotions (the integrated marketing communication mix) and place (distribution channels), could determine the target customers’ perceptions of the firms’ products (or services), in a given competitive context.

The extent to which a product is promoted can have a huge effect on consumer demand. The products’ price will usually determine their target market. Low-priced products may attract price-sensitive markets. Such products will be promoted through different marketing communications channels other than high-priced, better quality, premium services. The more expensive the products; the higher the customers’ expectations. Considerable thought and action must go into product development so as to provide the customer with a valuable service which reflects the product’s price. One of the most significant promotional tools is word-of-mouth publicity. For instance, online reviews and ratings are increasingly playing a major role in tourism marketing.

When making a pricing decision, the businesses should consider their distribution costs. The companies’ intermediaries, including; tour operators, online travel agents, and the like, will expect financial compensation for selling travel products. Alternatively, they will expect discounts and special incentives to push the businesses’ products to consumers. For example, they may book large seat orders and place substantial mark-ups on seats which they have bought from the airline (these products may be demanded for inclusive tours). These factors must always be taken into consideration by the airline marketing managers, as they have to add mark-ups to the cost price of seats, when selling them to intermediaries.

Market Demand

There is a highly segmented market for tourism products. Each of the market segments vary in terms of elasticity, and service requirements. These variables will influence the way in which prices a set.

The business travel segment is generally more inelastic in demand. Fluctuations in prices will not affect demand to any great extent. However, the business travel segment expects a high-quality service. Generally, business travellers are prepared to pay a higher price for such services. The higher fares will not only cover the costs of the superior service, but will also convey an image of a premium, prestige product.

The passengers from the leisure travel segment are usually price-sensitive. Their expectations are somewhat lower than those of the business travellers. Demand is extremely elastic in this segment; and an increase in price may result in lower demand.

The socio-political factors may affect market demand. If a destination is politically or socially unstable, tourists may not want to go there. Most people like to feel safe and comfortable. For instance, many destinations have experienced dramatic reductions in the number of tourist arrivals, following the terrorist activities in certain countries.

Economic factors, including the individuals’ income and well-being, will affect their propensity to travel. However, this may not necessarily translate to an increased demand for all tourism products. For instance, if leisure travellers receive an increase in income, they may decide to travel to long-haul destinations rather than short-haul itineraries. Alternatively, these clients may increase the quality and standard rather than to increase their frequency of travel. Such customers may decide to upgrade their hotel accommodation, or to travel in higher classes. Income may affect demand according to the purpose of travel. For business travellers it may not make much difference, whilst for leisure travellers it can make quite a substantial difference. Their demand may also be influenced by the availability of substitute products. If there are no substitutes for the product, then consumers will be forced to buy regardless of price.

In addition, customers may develop perceptions about tourism products. Whether they are accurate or not, they could influence their purchase behaviours. Therefore the travellers’ perceptions, the online ratings and reviews should be carefully considered, as tourism products must always be purchased in advance.

Competition

The businesses should be aware of their competitors’ prices. They may decide to respond to their rivals’ pricing strategies, or to be proactive by taking the pricing initiative, themselves.

Responding to the Competitors’ Pricing Initiatives

There is no rigid method of responding to a price initiative taken by competitors. Every situation is unique. However, businesses are capable of making confident decisions if they examine the situation from different viewpoints:

At times, competitors may decide to lower their prices: It is not wise for other businesses to follow suit, unless they establish why their competitors are pursuing such a pricing strategy. It may be the case that the competitors have made a bad decision. It must be determined whether the competitors’ pricing initiative was a long term or a short term one. For instance, an airline’s poor fleet planning may result in the company changing its prices on a long-term basis. In such situations, rivals will have to respond or risk losing their market share. Price reductions will eventually lead to lower yields for the airline. As a result, this will have a negative impact on the airline and its long-term sustainability prospects. If the pricing initiative appears to be a short-term action, it is advisable to ignore it, and to avoid de-stabilising the market.

The price reductions on certain products may be questioned by the airline’s customers. As discussed above, the airlines may usually charge higher prices for their business and first class as these services are considered as prestige products. The airlines can differentiate themselves from competitors when they provide superior services; that are perceived as an index of quality and corporate image.

On the other hand, the airlines’ should continuously monitor those competitors who are resorting to price-cutting policies. Certain leisure markets may be more price-sensitive than others, as they may exhibit higher price-elasticity levels. The lower prices could result in an increase in demand for the economy class of service.

Taking the Price Initiative

Generally, businesses may avoid lowering their fares, as this will affect their bottom lines. Price wars have destroyed the profitability of many businesses. However, there may be a tendency toward price competition: when firms have low variable costs; when there is little differentiation among the competitors’ products; when industry growth rate is low, and; when the economies of scale are important. The businesses need to consider their cost levels before taking the initiative to lower their prices. The lean businesses who may have less costs, will usually be in a much stronger position to lower their prices than other competitors with high costs. However, more established high-cost businesses may have stable financial backing, which will enable them to meet, if not undercut, the new companies’ prices. They could eventually push their competitors out of the market.

An increase in price may be required if the business is facing controllable or uncontrollable costs. For example, if the airlines’ uncontrollable costs, include; increased airport landing fees and air traffic control charges; they may either decide to absorb these costs or alternatively, they may increase their fares as a means of covering these added costs. Of course, rival airlines will also face the same pressure. In such cases, the airlines could inform their customers about their uncontrollable costs, which have forced them to increase their fares. Ongoing corporate communications and public relations will help them to maintain their customers’ goodwill. On the other hand, the airlines’ controllable costs, including the employees’ salaries and wages, are under their direct responsibility. Such costs may not justify taking pricing initiatives to improve the organisation’s financial performance. They may even aggravate the airline’s profitability, in the long-term.

Legal and Regulatory Issues

Legal and regulatory issues may have an impact on a company’s pricing structure. Although, the airline industry has experienced deregulation and liberalisation in the past decades, there is still some government intervention, in certain areas. In international markets, air service agreements between governments necessitate that national airlines should meet and agree on the fares and rates to be charged to passengers. The agreed fare is brought back to both the airline’s governments who have the right to veto the fare. Should this happen, the airline concerned must seek to re-open negotiation.

Deregulation and liberalisation have affected the airlines’ pricing policies in many contexts. For example, liberalisation has changed the fares regime in the United States of America, in the European Union and in many other places. Today, several airlines have introduced lower fares which have contributed to increased travel. Moreover, the rise of the low-cost carriers has often resulted in lower air fares within pre-agreed zones. Evidently, pricing is increasingly being used as a competitive tool, in many contexts.

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